Deutsche Bank chairman Josef Ackermann warns that total sub-prime losses are likely to be $150bn to $250bn, triple the bank's estimate in July

The suspicion is that banks in Germany, Spain, and Britain are still trying to muddle through in the hope that the market for CDOs will recover enough to bail them out.

The losses are already bad enough. A study by Barclays Capital found that 16pc of sub-prime mortgages taken out in January 2006 are in default, and 28pc are in arrears beyond 30 days. Struggling to catch up, the rating agencies downgraded a further $100bn of mortgage debt in October alone

while the "toxic" BBB tranches have lost almost four fifths

Suki Mann, a strategist at Société Générale, said the credit markets feared an "Armageddon scenario" once again. "We're back to pre-September risk-aversion mode," he said